Rumor: Sprint and T-Mobile team up to bid on spectrum

Rumor: Sprint and T-Mobile team up to bid on spectrum
Speculation has T-Mobile and Sprint putting together a $10 billion war chest, to use in next year's auction of 600MHz spectrum being conducted by the FCC. The money is believed to be coming from the financing package that SoftBank is obtaining in order to buy 50% of T-Mobile's shares. The partnership for the bidding will be led by T-Mobile.

T-Mobile and Sprint will be allowed to put together this joint venture, and act as a single entity for business reasons. Earlier this year, there was speculation that the FCC would limit the amount of spectrum any one company could win at the auction, which is shaping up to be the largest such auction since 2008.

Sprint and T-Mobile are concerned about how much spectrum Verizon and AT&T will be adding to its current holdings. AT&T is believed to have set aside $9 billion to spend at the auction, while Verizon has not revealed a figure. The spectrum being auctioned off is low frequency, which means it can travel over long distances and can penetrate buildings better. Verizon and AT&T control most of the currently used low frequency spectrum, making it extremely valuable for Sprint and T-Mobile to purchase.

The FCC has already set aside as much as one-third of the spectrum that is up for grabs in particular markets, for smaller competitors taking part in the auction. Obviously, a combined Sprint-T-Mobile, whether completely merged as one carrier, or just combining their wallets to go against Verizon and AT&T in the auction, could not be considered a smaller company by any stretch of the imagination. But perhaps that is the idea. FCC and FTC regulators worried about AT&T and Verizon, might feel the need to turn to a combined Sprint and T-Mobile as a way to keep the nation's top two carriers in check.

source: Fortune



1. Planterz

Posts: 2120; Member since: Apr 30, 2012

I'm not very enthusiastic about the T-Mobile/Sprint merger, but even if that falls through, getting some low-frequency bandwidth is definitely good for T-Mobile (and Sprint, I guess). T-Mo's already got 700MHz (band 12) on the way, but more is always better.

2. Doakie

Posts: 2478; Member since: May 06, 2009

Sprint has a nations worth of 800 MHz spectrum. I'm surprised no one thinks of that as "low frequency" spectrum. The only way I can possibly think a T-Mobile Sprint merger would work is if T-Mobile was the surviving company merging all Sprints customers and spectrum into their portfolio. I know that's what current rumors have said but I'll believe it when I see it. Sprint taking over would just mean a horribly slow moving incompetent company being put in charge of A LOT of customers.

3. a_merryman

Posts: 749; Member since: Dec 14, 2011

People do think of it as low frequency spectrum. They still can't use it in IBEZ regions, and they can only make a FDD 5 MHz LTE carrier on it. They are still dwarfed by AT&T and VZW in the low frequency game.

4. Joshua9007

Posts: 94; Member since: Jun 08, 2012

I agree that the duopoly has substantially more capacity in the low bandwidth game, but since sprint has fewer customers and most of them are not in areas outside the current 1900Mhz PCS footprint, the 800Mhz spectrum will serve to fill in some gaps in coverage and extend the current coverage a few miles further past what they currently have. Plus with fewer customers in those areas, the speed and reliability of their offering will be fine at least until they purchase and launch 600Mhz spectrum.

5. a_merryman

Posts: 749; Member since: Dec 14, 2011

Oh yeah, they have enough low frequency to get by until the 600 auction so long as their subscribers don't skyrocket in the mean time. Especially since 2.5 GHz will be taking the bulk of the data transfers. I was just pointing out that Sprint and T-Mo are both in horrible positions when it comes to low frequency. Truthfully, AT&T looks to be in the worst shape for performance in the long run, they don't have much contiguous spectrum across the country.

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